Make The World
More Sustainable[Provisional Translation Only]
This English translation of the original Japanese document is provided solely for information purposes.
Should there be any discrepancies between this translation and the Japanese original, the latter shall prevail.

November 24, 2022
IssuerIchigo Office REIT Investment Corporation (“Ichigo Office,” 8975)
1-1-1 Uchisaiwaicho, Chiyoda-ku, Tokyo
Representative: Takaaki Fukunaga, Executive Director
www.ichigo-office.co.jp/en
Asset Management Company
Ichigo Investment Advisors Co., Ltd.
Representative: Hiroshi Iwai, President
Inquiries: Norio Nagamine, Head of Ichigo OfficeTel: +81-3-3502-4891

Acquisition of Office Asset (Ichigo Marunouchi South Building)
Ichigo Office decided today to acquire an office asset, the Ichigo Marunouchi South
Building.
1. Asset Acquisition Summary
Asset Number
Asset Name1

O-98
Ichigo Marunouchi South Building

Asset Type

OfficeDate Built

January 19, 1988

Legal Form of Asset Trust beneficiary interest in real estate (juekiken)
Appraisal Value2

JPY 1,850 million

Acquisition Price3

JPY 1,750 million

Seller4

A Third-Party Japanese CompanyBroker

A Third-Party Broker

Contract Date

November 24, 2022Closing Date

November 30, 2022 (expected)

Financing Method

Cash-on-hand (expected)

Settlement Method

Lump-sum payment

1Ichigo Office will change the building name from the ISM Nagoya Marunouchi
Building to the Ichigo Marunouchi South Building. For purposes of this release, thebuilding is referred to as the Ichigo Marunouchi South Building.
2Appraisal Value is calculated by Tanizawa Sogo Appraisal as of November 1, 2022,
and is in compliance with the appraisal guidelines of Ichigo Investment Advisors(“IIA”) as well as the rules of the Investment Trusts Association of Japan.

1

3Acquisition Price excludes incidental expenses such as fees and property, city
planning, and consumption taxes.
4The seller, a third-party Japanese company, did not provide consent to disclose itsname.
2. Acquisition Rationale
As a specialized office REIT with stable earnings and a diversified portfolio, Ichigo
Office continues to execute on its strategy to grow shareholder value by focusing its
portfolio on high-quality, mid-size office assets.
The Ichigo Marunouchi South Building is located in the Nagoya Marunouchi area, aprominent business and financial district near several government buildings including
the Aichi Prefectural Office and the Nagoya City Hall. The area is also home to theBank of Japan’s Nagoya Branch and numerous large companies, SMEs, andprofessional service providers such as law firms, accounting firms, and tax accountants.
The area has recently been undergoing rapid redevelopment at a scale second to thatoccurring around the Nagoya Station area. In addition to conducting value-add capex on
the building, Ichigo Office can draw upon its operational know-how from owning six
other assets in Nagoya City to drive stable earnings.
The existing tenants of the Ichigo Marunouchi South Building satisfy the tenant
standard stated in the “Financial Report (Yuka Shoken Hokokusho)” (Japanese only)
disclosed on July 28, 2022.
Please refer to Section 3 “Details of the Ichigo Marunouchi South Building”
immediately below for additional details on the asset’s features and characteristics that
underpinned the acquisition decision, and the locations of the six Ichigo Office assets inNagoya City.
3. Details of the Ichigo Marunouchi South Building(1) Location
The Ichigo Marunouchi South Building is located in the Nagoya Marunouchi area, acommercial district located north of the Sakae and Fushimi areas, with mid- and highrise office buildings concentrated along the Sakura Dori Street.
The Marunouchi area benefits from stable tenant demand spanning multiple industries
owing to its convenient access to locations within the city via the Marunouchi andHisaya Odori Stations on the Sakura Dori Subway Line, and its proximity to theSannomaru area which is home to government buildings including the Aichi Prefectural
Office and the Nagoya City Hall.
(2) Features
The Ichigo Marunouchi South Building is a mid-size office building located within a 2minute walk from the Marunouchi Station on the Sakura Dori Subway Line.
Each floor has a standard floor plate of 88 tsubo (290m2; sub-divisible into 5 zones) anda ceiling height of 2.6 meters, and is equipped with zoned air conditioning systems andraised-access floors, thus catering to the demands of diverse tenants.
Current tenants include the Nagoya branch offices of an IT company and a logistics
equipment manufacturing company, and a law firm.

2(3) Building Photos and Location

3

Asset NameLegal Form of Asset
Trustee
Period of Trust Contract
Location
Property RightAreaLandZoningCoverage Ratio
Floor Area Ratio
Property Right
Use
Building Structure
Total Floor Area
Date Built
Appraiser
Appraisal Value

Asset Overview
Ichigo Marunouchi South Building
Trust beneficiary interest in real estate (juekiken)
Mitsubishi UFJ Trust and Banking Corporation
November 30, 2022 – November 30, 2032 (expected)
2-2-24 Nishiki, Naka-ku, Nagoya City, Aichi
Freehold499.33m2
Commercial
80% & 80%
700% & 900%
Freehold
OfficeSteel Reinforced Concrete, 8 Floors
2,972.06m2January 19, 1988
Tanizawa Sogo Appraisal Co., Ltd.
JPY 1,850 million
November 1, 2022

Appraisal Date
Value by Direct Capitalization
JPY 1,930 million
MethodToda Corporation, Nagoya Branch, First-Class Registered
Architect1
Architects Office1
Builder
Toda Corporation, Nagoya BranchToda Corporation, Nagoya Branch, First-Class Registered
Structural Designer1
Architects Office1
Inspection Agency
Nagoya City
PML (Assessor)
5.6% (Sompo Risk Management Inc.)
Collateral
None
Lease Details (as of October 31, 2022)
Tenant Overview
23
Number of Tenants
Monthly Rental Income
JPY 5.530 million
Tenant Security Deposits
Leasable Area
Leased Area
Occupancy
Property Management
Company
Master Lease Company
Master Lease TypeJPY 39.387 million
1,973.27m2
1,669.91m2
Oct 2020 Apr 2021
90.2%
87.8%

Oct 2021
85.3%

Apr 2022
82.9%

Oct 2022
84.6%

Property Partners Co., Ltd. (expected)
Ichigo Office REIT Investment Corporation (expected)
Pass-through (expected)

4

Special Items
1. A memorandum of understanding is in place with the neighbor on the northern border ofthe building (lot numbers 221-1, 221-2, and 221-3) with respect to rectifying the fence thatencroaches into the neighbor’s property when the building is scraped and rebuilt.
2. Although the building schematic shows that the automated entrance doors should have awidth greater than 1.5 meters in order to serve as an emergency escape route to the outdoor
staircase, an engineering report has indicated that this is not the case and the seller has
agreed to rectify this at its own cost.
3. A lease termination notification was received from one of the tenants (leased area:38.15m2) on June 20, 2022 for an effective termination date of December 20, 2022, afterwhich occupancy is expected to be 82.7%.
1Names of the architect, builder, structural designer, and inspection agency are those as of
the building’s construction date.

5Asset Name
Appraisal Value
Appraiser
Appraisal Date

Appraisal Value
Value by Direct
Capitalization Method
IncomeForecast FullOccupancy Rental
IncomeForecast Decrease
in Rental Income
due to Vacancy
Expenses
Administrative &MaintenanceExpensesUtility Expenses
Repair Expenses
PM FeeLeasing
Brokerage Fees
Taxes
Insurance
Premiums
Other Expenses
Net Operating
Income (NOI)
Income from
Investments ofDeposits
CapitalExpenditureNet Profit

Appraisal Details
Ichigo Marunouchi South Building
JPY 1,850,000,000
Tanizawa Sogo Appraisal Co., Ltd.
November 1, 2022
AmountNote
Calculated using an income approach,with a DCF valuation as a basis andJPY 1,850,000,000
verified using a direct capitalization
valuation
JPY 1,930,000,000
JPY 107,912,477
Based on expected long-term, stablerental income, common area service
JPY 114,233,134
income, parking lot income, and otherincome
JPY 6,320,657

Based on long-term, normalized
vacancy rates

JPY 24,725,159
JPY 6,985,376 Based on actual amounts
JPY 5,091,037 Based on actual amounts
JPY 2,040,000 Based on engineering reports
Based on existing contractual fees and
JPY 2,014,280
reference to similar assets
Based on tenant acquisition costs at
JPY 621,934
similar assets
JPY 7,149,200 Based on FY2022 actual amounts
Based on insurance estimates and
JPY 283,770
reference to similar assets
JPY 539,562 Based on actual amounts
JPY 83,187,318
JPY 449,585 Based on a 1.0% investment yield
JPY 4,573,000 Based on engineering reports
JPY 79,063,903
Based on transactions of similar assets,
while taking into account the asset’s
4.1% location and specific characteristics,
rights, and terms and conditions of thecontract

Cap Rate

6

Value via DCF Method

JPY 1,810,000,000
Based on yields of similar assets
and financial assets, taking into
4.2%
consideration the asset’s location andspecific characteristics
4.3% Cap rate adjusted for uncertainties

Discount Rate
Terminal Cap Rate
Accounting ValueLand
Building

JPY 1,630,000,000
82.7%
17.3%
Notes

None
Note: Appraisal NOI Yield: 4.8% (calculated by dividing NOI by Acquisition Price)
4. Seller Profile
Name

The seller, a third-party Japanese company, did notprovide consent to disclose its name.

Relationship toIchigo Office orIchigo Investment
Advisors (IIA)

The seller does not have any material capital,personnel, or transactional relationship with Ichigo
Office or IIA. In addition, the seller is not a related
party as defined in the Act on Trusts and Investment
Corporations or the internal rules of IIA.

5. Broker Profile
Name

The broker did not provide consent to disclose itsname.

Relationship toIchigo Office or
Ichigo Investment
Advisors (IIA)

The broker is not a related party as defined in the Act
on Trusts and Investments Corporations or the internal
rules of IIA.

Brokerage Fee

The broker did not provide consent to disclosethe fee.

6. Acquisition Schedule
November 24, 2022

Acquisition Decision Date
Contract Date
Closing Date

November 24, 2022
November 30, 2022 (expected)

7. Earnings Impact
There is no impact of the acquisition, which will be executed on November 30, 2022, on
Ichigo Office’s October 2022 fiscal period earnings. The impact of the acquisition onApril 2023 fiscal period earnings is minimal and thus there is no change to the forecast
presented in Ichigo Office’s October 31, 2022 release, “Earnings Forecast Revision forthe April 2023 Fiscal Period.”7

Reference
1. Earnings Profile of Asset Being Acquired(JPY million)
Forecast1

At Acquisition2

A. Rental Income
B. Rental Expenses(excluding depreciation)3
C. NOI (A-B)

10784

24238360

D. NOI Yield4

4.8%

3.5%

E. Depreciation5

917

F. Post-depreciation NOI (C-E)

7343

G. Post-depreciation NOI Yield4

4.2%

2.5%

H. Occupancy6

97.0%

84.6%

1Amounts exclude one-off factors in the year of acquisition and are calculated based on
current and future anticipated fluctuations in occupancy.
2
Shows first-year amounts used to calculate the DCF-based valuation, excluding one-off
factors in the year of acquisition.
3
Rental Expenses include incidental expenses such as service provider fees, taxes,maintenance and repair fees, insurance premiums, and other fees.
4
Calculated based on Acquisition Price.
5
Depreciation is as estimated by Ichigo Office using the straight-line method.
6
Occupancy at acquisition is as of October 31, 2022.
2. Engineering Report Summary
Asset Name
Inspector Name
Inspection Date
Short-Term Repair Expenses1
Long-Term Repair Expenses2
Current Replacement Cost

Ichigo Marunouchi South Building
Tokio Marine dR Co., Ltd.
September 2022–
JPY 75.339 million
JPY 1,009.9 million

1

Short-Term Repair Expenses are defined as repair expenses beyond the scope ofordinary maintenance within a year from the time of inspection.
2
Long-Term Repair Expenses are defined as cumulative repair expenses considerednecessary for the maintenance of the asset within twelve years from the time ofinspection.

8

3. Post-Transaction Portfolio
No.
O-02
O-03
O-04
O-05
O-06
O-07
O-09
O-10
O-11
O-12
O-14
O-15
O-16
O-17
O-18
O-19
O-20
O-21
O-22
O-23
O-24
O-26

Area1

Asset Name

O-27
O-28
O-29

Ichigo Nishisando Building
Ichigo Mita Building
Ichigo Nanpeidai Building
Ichigo Hanzomon Building
Ichigo Hijirizaka Building
Ichigo Shibuya Kamiyamacho Building
Ichigo Shibakoen Building
Ichigo Ebisu Nishi Building
Ichigo Ginza 612 Building
Ichigo Uchikanda Building
Ichigo Yotsuya 4 Chome Building
Ichigo Tameike Building
Ichigo Jimbocho Building
Ichigo Hakozaki Building
Ichigo Kudan 2 Chome Building
Ichigo Kudan 3 Chome Building
Ichigo Gotanda Building
Ichigo Shin Yokohama Building
Ichigo Minami Ikebukuro Building
Ichigo Nakano North Building
Ichigo Eitai Building
Ichigo Ikejiri Building
Ichigo Nishi Ikebukuro Building
Ichigo Nishi Gotanda Building
Ichigo Kichijoji Building

O-34

Ichigo Sakae Building

O-37

Ichigo Marunouchi Building

O-38
O-39
O-42
O-46
O-47

Ichigo Toyamaeki Nishi Building
Ichigo Mirai Shinkin Building
Ichigo Takamatsu Building
Ichigo Kanda Nishikicho Building
Ichigo Akihabara North Building

O-48

Ichigo Sakaisuji Honmachi Building

O-49
O-50

Ichigo Kanda Ogawamachi Building
Ichigo Hatchobori Building

Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Tokyo Metro Area
Tokyo Metro Area
Tokyo Metro Area
Tokyo Metro Area
Tokyo Metro Area
Tokyo Metro Area
Central Tokyo
Tokyo Metro Area
Four Major Regional
CitiesFour Major RegionalCities
Other Regional Cities
Other Regional Cities
Other Regional Cities
Central Tokyo
Central Tokyo
Four Major RegionalCities
Central Tokyo
Central Tokyo
9Acquisition
Price(JPY million)% ofPortfolio2

3,254
2,740
1,920
1,550
1,200
1,505
1,100
1,917
1,773
1,140
550
580
1,820
1,150
763
844
5,060
1,816
1,460
764
1,490
2,030
639
765
2,160

1.6
1.3
0.9
0.8
0.6
0.7
0.5
0.9
0.9
0.6
0.3
0.3
0.9
0.6
0.4
0.4
2.5
0.9
0.7
0.4
0.7
1.0
0.3
0.4
1.0

4,705

2.3

6,710

3.3

1,645
1,158
3,010
2,130
5,5000.8
0.6
1.5
1.0
2.7

1,940

0.9

2,210
1,905

1.1
0.9

No.
O-51
O-52
O-53
O-54
O-55
O-56
O-57
O-58
O-59
O-60
O-61
O-62
O-63
O-64
O-65
O-66
O-67
O-68
O-69
O-70
O-71
O-72
O-73

Area1

Asset Name
Ichigo Ebisu Green Glass
Ichigo Omori Building
Ichigo Takadanobaba Building
Ichigo Omiya Building
Ichigo Sagamihara Building
Ichigo Ofuna Building
Ichigo Sendai East Building
Ichigo Kumamoto Building
Ichigo Jingumae Building
Ichigo Shibuya Dogenzaka Building
Ichigo Hiroo Building
Ichigo Sasazuka Building
Ichigo Nihonbashi East Building
Ichigo Sakurabashi Building
Ichigo Shinkawa Building
Ichigo Kudan Building
Ichigo Higashi Gotanda Building
Axior Mita
Ichigo Higashi Ikebukuro Building
Koriyama Big-i (Office Section)
Ichigo Kawasaki Building
Ichigo Shibuya East Building
Ichigo Ningyocho Building

O-74 Ichigo Nishi Honmachi Building
O-75 Ichigo Hakata Building
O-76 Ichigo Nishiki First Building
O-78 Ichigo Ikebukuro East Building
O-79 Ichigo Motoazabu Building
O-80 Ichigo Otsuka Building
O-81 Ichigo Nagoya Building
O-82 Ichigo Fushimi Building
O-83 Ichigo Nishiki Building
O-84 Ichigo Minami Morimachi Building
O-85 Ichigo Shibuya Udagawacho Building
O-86 Win Gotanda Building

Central Tokyo
Central Tokyo
Central Tokyo
Tokyo Metro Area
Tokyo Metro Area
Tokyo Metro Area
Other Regional Cities
Other Regional Cities
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Central Tokyo
Tokyo Metro Area
Other Regional Cities
Tokyo Metro Area
Central Tokyo
Central Tokyo
Four Major Regional
CitiesFour Major RegionalCities
Four Major RegionalCities
Tokyo Metro Area
Central Tokyo
Tokyo Metro Area
Four Major RegionalCitiesFour Major Regional
CitiesFour Major Regional
CitiesFour Major Regional
CitiesCentral Tokyo
Central Tokyo
10

Acquisition
Price(JPY million)
5,900
3,850

% ofPortfolio2

1,580
3,430
1,174
2,000
1,840
1,450
7,200
3,650
3,960
4,780
4,700
2,500
2,360
3,190
3,660
1,800
4,570
1,660
1,750
1,350
1,450

2.9
1.9
0.8
1.7
0.6
1.0
0.9
0.7
3.5
1.8
1.9
2.3
2.3
1.2
1.1
1.5
1.8
0.9
2.2
0.8
0.8
0.7
0.7

2,190

1.1

1,380

0.7

2,000

1.0

3,010
1,890
2,740

1.5
0.91.3

3,420

1.7

2,340

1.1

1,330

0.6

1,040

0.5

3,500
3,100

1.7
1.5

No.
O-87
O-88
O-89
O-90
O-91
O-92
O-93
O-94
O-95
O-96
O-97
O-98
Z-09
Z-10
Z-11
Z-14

Area1Asset Name
Ichigo Hongo Building
Oimachi Center Building
Win Gotanda Building 2
MIF Building

Tokyo Metro Area
Central Tokyo
Central Tokyo
Central Tokyo
Four Major Regional
Ichigo Uchi Honmachi Building
CitiesIchigo Minami Otsuka Building
Tokyo Metro Area
Ichigo Nogizaka Building
Central Tokyo
Four Major Regional
Ichigo Hakata East Building
CitiesIchigo Nakameguro Building
Tokyo Metro Area
Ichigo Tachikawa Building
Tokyo Metro Area
Ichigo Higashi Ikebukuro 3 Chome Building Tokyo Metro Area
Four Major
Ichigo Marunouchi South Building
Regional Cities
Subtotal - Office (82 Assets)
Future IZUMIOther Regional Cities
Ichigo Shibuya Bunkamura Dori Building
Central Tokyo
Twicere Yokohama Isogo (Retail Section)
Tokyo Metro Area
Ichigo Kamata Building
Tokyo Metro Area
Subtotal - Other (4 Assets)
Total (86 Assets)

TK Equity Investment GK Kizuna1 TK Equity Interest

AcquisitionPrice(JPY million)% ofPortfolio22,300
1,680
3,300
2,200

1.10.8
1.6
1.1

1,900

0.9

2,780
3,315

1.4
1.6

2,250

1.1

1,495
3,830
3,840

0.7
1.9
1.9

1,750

0.8

199,287
1,210
2,400
1,620
1,400
6,630
205,917

96.8
0.6
1.2
0.8
0.7
3.2
100

50–1

Central Tokyo refers to Chiyoda, Minato, Chuo, Shinjuku, Shibuya, and Shinagawa Wards. Tokyo Metro
Area refers to Tokyo (excluding the six wards above), Kanagawa, Chiba, and Saitama Prefectures. Four
Major Regional Cities refers to Osaka, Nagoya, Fukuoka, and Sapporo.
2% of Portfolio is based upon acquisition price.
Note: The above portfolio excludes the Ichigo Ikenohata Building scheduled to be sold on December 20,
2022. For details of the asset sale, please refer to the October 31, 2022 release, “Sale of Portfolio
Asset (Ichigo Ikenohata Building).”11